SAA and Singapore Airlines settle South African claims

South Africa’s Competition Commission has settled with South African Airways (SAA) and Singapore Airlines over price fixing on flight routes between Hong Kong and Johannesburg. Singapore Airlines has agreed to settle for ZAR 25.1 million (approximately AUD3.3 million) and SAA will pay ZAR 18.8 million (approximately AUD2.5 million).

The investigation was initiated by Cathay Pacific’s application for leniency in January 2008. Malaysian Airlines was also included in the investigation. SAA’s agreement also resolves two further allegations, being that:

SAA colluded with other airlines concerning international air cargo surcharges, domestic route prices, and pricing strategies during the 2010 Football World Cup; and

SAA participated in a cartel to fix the prices of the fuel surcharges and rates on cargo flown in and out of South Africa.

With respect to the second matter, the Commission referred seven airlines to South Africa’s Competition Tribunal in July 2010, alleging that the carriers had engaged in fuel price-fixing since 1996 when there was a price hike of jet fuel. Ultimately, no findings were made against SAA in respect of these two matters.

The Commission has not given an explanation for why it has not made any findings with respect to the air cargo and World Cup cases. If the Tribunal confirms the settlement agreement in its current form, the absence of an admission in respect of the air cargo and World Cup cases will preclude civil claims for damages against SAA based on that conduct.